Today the Kitsap Sun begins a four-part series on the Kitsap
County Consolidated Housing Authority (now Housing Kitsap), and how
it nearly folded in 2008. That it nearly folded is not news. We
reported on that as events unfolded. In the series, we attempt to
give the back story, and to provide a comprehensive retrospective,
now that the agency has moved on from its troubled past.
At the bottom of this post, you’ll find links to some of the key
public records we accessed in the course of our research, including
e-mails from elected officials and others, financial records and a
The series, in the works for a year, tracks the housing
authority’s financial woes related to its Harborside Condominium
project and other factors, including the recession (days 1 and 2).
The series moves on with a look at how the agency has gotten back
on track and rededicated to its mission of affordable housing (day
3). Readers will also get a peek inside the lives of condo owners
who reside in one of the most talked-about (and upscale) complexes
in Kitsap County (day 4).
Delving into the cause of KCCHA’s financial meltdown, we found
nothing illegal. We did find a culture of risk-taking within the
agency that left it far more vulnerable than other Washington State
housing authorities when the recession hit and the housing market
imploded. The result is that public money will be paying off
substantial debt on the private condo complex for what could be
In the course of our research, we made public records requests
for e-mails between and about housing authority board members and
staff, financial records and a video of the 2005 meeting at which
the county’s board of directors agreed to back a portion of
financing on the condos.
State law provides for open access to
public records. Three public records bills that would have made
compliance with the law easier for local governments appear to be
dead in the water in Olympia.
Without personally taking a position on the bills, I’d like to
acknowledge the efforts of the public records officials who
complied with our requests. The e-mail requests alone yielded well
over 1,000 documents, each of which had to be reviewed for
information to be redacted (as in attorney client privilege) before
it was turned over to us.
The clerks and IT specialists who complied with our requests
were just doing their jobs, as we were just doing ours in reporting
the story. But it’s worth noting that the public’s access to
records comes with a cost of time and energy within the agency
asked to comply. That translates to public dollars. So the right to
access public records is not one we at the Kitsap Sun take
Local governments and agencies complying with the Kitsap Sun’s
public records request included: Housing Kitsap, the cities of Port
Orchard, Bremerton, Poulsbo and Bainbridge Island, Kitsap County
and Bremerton Kitsap Access Television.
In addition to our interviews conducted with elected officials,
staff at Kitsap County and Housing Kitsap provided extensive
information for the story.
Here are the public records:
KCCHA Condo Loan, Feb. 14, 2005
Condo Loan, Feb. 14, 2005
The Kitsap County Board of Commissioners on Feb. 14, 2005, entered
into a contingent loan agreement with the Kitsap County
Consolidated Housing Authority (now Housing Kitsap) to back a $22
million bond on the Harborside Condominiums.
KCCHA Condo Loan, Minutes, Feb. 14, 2005
Minutes of the Feb. 14, 2005 meeting of the Kitsap County Board of
Commissioners, at which the board approved a contingent loan
agreement with the Kitsap County Consolidated Housing Authority on
the Harborside Condominium project. See item (8) a.
Video of Feb. 14, 2005 BOCC Meeting
KCCHA CondoConcerns, July 26, 2007
This is an e-mail from a couple who bought one of the Harborside
Condominiums in Bremerton when the project was “just a dream.” Rick
Shaver, the condo owner, writes to the contractor with multiple
complaints about poor workmanship and delays. The e-mail is copied
to Bremerton Mayor Cary Bozeman who forwards it to Kitsap County
Consolidated Housing Authority Executive Director Norm McLoughlin.
KCCHA was in charge of the projects. Bozeman writes, “You should be
aware of this.”
KCCHA Operating Deficit, Jan., 2008
A financial summary for the Kitsap County Consolidated Housing
Authority showing an operating deficit of nearly $300,000 per
KCCHA Spreadsheets, Nov., 2007 to April, 2008
Kitsap County Consolidated Housing Authority documents give
financial “snapshots” of the agency’s fiscal profile from Nov.,
2007 to April, 2008.
KCCHA bauer.eml, Aug. 29, 2008
This is an Aug. 29, 2008, e-mail from Kitsap County Commissioner
Steve Bauer to a North Kitsap Fire and Rescue Chief in which Bauer
shares the financial woes of Kitsap County Consolidated Housing
Authority. Bauer writes that “the Bremerton (Harborside) condos are
eating them alive.”
KCCHA countertop.complaint, Aug. 8, 2008
In this e-mail letter to Kitsap County Consolidated Housing
Authority Executive Director Norm McLoughlin, condo owner, Patrick
M. Rodgers complains about the material used in the countertops of
his condo and threatens legal action if the problem is not
remedied. The correct material was used, but the contractor applied
the wrong finish, causing defects. All the countertops using this
type of stone had to be replaced. The e-mail is copied to the
agency’s board of directors.
KCCHA bauer.eml.Sept. 12, 08
Kitsap County Commissioner writes in a Sept. 12, 2008, e-mail to a
financial consultant, that Kitsap County Consolidated Housing
Authority Executive Director Norm McLoughlin has been using one of
the agency’s lines of credit as a “private venture capital fund to
cover ‘exploration’ of new ventures without telling the (housing
KCCHA change/leadership, Oct. 2, 2008
In this e-mail exchange from early October 2008, among North Kitsap
Commissioner Steve Bauer and the mayors of the North Kitsap cities
of Poulsbo and Bainbridge Island, Bauer informs Kathryn Quade and
Darlene Kordonowy that the county’s board of commissions wanted a
“change of leadership” in the Kitsap County Consolidated Housing
KCCHA Next Steps, Oct. 9, 2008
In this e-mail exchange with members of the Kitsap County
Consolidated Housing Authority Board of Directors, finance director
Debbie Broughton lays out a fiscal strategy for keeping the agency
from failing, as well as terms for her acceptance of the position
of interim director. Last e-mail was sent just days before
Executive Director Norm McLoughlin abruptly retired.
KCCHA mcloughlin retirement Oct. 14, 2008
This is an e-mail exchange between Port Orchard Mayor Lary Coppola,
of the Kitsap County Consolidated Housing Authority Board of
Directors, and attorney Will Patton of Foster Pepper law office,
regarding the retirement agreement for Norm McLoughlin, the
agency’s executive director. The agreement, copied to other members
of the housing authority board, is in draft format and shows items
under negotiation shortly before McLoughin announced his
retirement. A draft of the press release that was to be sent upon
announcement of his retirement is included in the e-mail.
KCCHA $40.5 million loan, May. 15, 2009
This is a copy of the loan agreement whereby Kitsap County bailed
out Kitsap County Consolidated Housing Authority. Called the
tri-party loan, it includes the Bank of America, lender, and
provides for refinancing of debt, including more than $30 million
related to the Harborside Condominiums.
KCCHA debt policy, May 18, 2009
This is a policy on debt approved by the Kitsap County Board of
Commissioners days after they approved a $40.5 million bailout for
the Kitsap County Consolidated Housing Authority. The policy set
more strict standards for the county on contingent loan agreements,
such as the one it entered into with KCCHA in 2005 on the
Harborside Condominium project.